In the United States, a whole-of-government effort of more than $14 billion was put together by the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization (Energy Communities IWG) to deliver new economic opportunities to communities hit hardest by the country’s evolving energy landscape, as well as to transform coal assets – from mining sites to power plants – into new clean energy infrastructure. This funding is seen as key to accelerate the deployment of clean energy projects in mining communities across the nation, strengthening rural economies and creating new, good-paying jobs, while also reducing greenhouse gas (GHG) emissions that affect public health and pollute local ecosystems.
Key elements
• The Energy Infrastructure Reinvestment Programme provides $250 billion in loan authority to replace aging energy infrastructure with environmentally cleaner alternatives, with the administration enacting 30-year direct loans to support the transition of coal assets. Funding mandates include an obligation for borrowers to present a transition plan for communities impacted by the changes. A Coal Power Plant Redevelopment Visualization Tool was developed to enable local officials, project developers, and power plant owners to identify opportunities for plant redevelopment and community reinvestment. Additionally, in the United States, there are approximately 300 retired or operational coal plant sites that would be eligible for a coal-to-nuclear conversion with small modular reactors (“Coal to X”). The administration has allocated funding to research and development (R&D), with National Labs having identified which plants have the most potential for a “Coal to X” transformation.
• As part of President Biden’s Investing in America agenda, the U.S. Department of Energy (DOE) also announced up to $450 million from the Bipartisan Infrastructure Law (BIL), the Chips and Science Act, and the Inflation Reduction Act to advance clean energy demonstration projects on current and former coal mine sites in the United States. This follows a 2021 study showing that approximately 17,750 mine land sites are located across 1.5 million acres in the United States, exposing local populations to harmful pollutants and contaminating the air, land, and water quality in the surrounding areas. Eligible clean energy technologies include solar, microgrids, geothermal, direct air capture, energy storage, advanced nuclear technologies, and fossil-fuelled electricity generation with carbon capture, utilization, and storage. In total, up to five clean energy projects will be carried out in diverse geographical regions, at least two of which must be solar projects. Projects may be on current or former mine land and includes clean energy projects that can aggregate multiple solar projects/sites.
• The U.S. Department of the Interior will deliver $10.9 billion in grant funding over 15 years to eligible states and Tribes to help communities eliminate dangerous environmental hazards and pollution caused by past coal mining while creating good-paying jobs and new economic opportunities in coal communities.
• The administration has developed a one-stop-shop platform for communities most likely to benefit from the various programmes to find the support and technical assistance required to navigate the various funding options.
• A rapid response programme was also put together to support communities on the ground, develop analysis of the diverse communities, assess their needs, and develop a long-term plan to help them navigate the transition. The long-term needs of communities vary on a case-by-case basis and each coal repurposing project should be approached from an “Economic Strategy Development” lens. These teams bring together 11 federal agencies to be coordinated and prioritize energy communities while making it simpler for communities and workers to access the resources they need.
• Interested applicants to those programmes are required to submit a Community Benefits Plan to outline how proposed projects will support community and workforce engagement; invest in the American workforce; advance energy and environmental justice; promote diversity, equity, inclusion, and accessibility; encourage collective bargaining and free and fair opportunities for workers to organize; and deliver benefits to disadvantaged communities as part of the Justice40 Initiative.
Benefits
• Repurposing extensive areas of land for clean energy projects is estimated to generate up to 90 gigawatts (GW) of clean energy - enough to power nearly 30 million American homes. Developing clean energy projects on mine land will also provide an attractive economic alternative to using undisturbed natural and agricultural land. Mine land is often located near critical infrastructure that makes it suitable for clean energy development, including electric substations, transmission lines, and access roads or railroad lines.
• Clean energy demonstration projects will be prioritized based on potential for technological innovation and commercial deployment, lowest levelized cost of generated or stored energy, lowest rate of GHG emissions per unit of electricity generated or stored, as well as timeline from permitting to completion. Priority will also be given to projects in locations where the greatest number of jobs can be created, especially in economically distressed areas, or where the number of dislocated workers is highest.
• 25 energy communities immediately impacted by coal plant and mine closures have been identified to prioritize stakeholder engagement.
• More than 9,000 stakeholders engaged as part of this community-driven approach.
• Created a one stop shop for funding, technical assistance, data, visualization tools, and information on energy transition.
• Deployed Rapid Response Teams to priority areas experiencing large transition impacts and lacking capacity to access federal resources.
• Delivering over $14 billion in federal funding and catalyzing private sector investments in energy communities which are building capacity, remediating land, creating infrastructure, and supporting economic growth that provides new job opportunities and offsets potential loss in tax revenue.
Enabling conditions
• Strong involvement of unions and civil society organizations to drive open dialogue beneficial to each unique community.
• Tools and resources to support the initiatives pipeline: the U.S. Department of Treasury and Internal Revenue Service (IRS) have partnered with the Energy Communities IWG to provide a searchable mapping tool that helps to identify areas that may be eligible for the energy communities tax bonus.
• Technical assistance to inform decision making on topics related to developing clean energy projects on mine lands, with the technical assistance intending to support project development, including concept development, planning, design, or execution (DOE’s Office of Clean Energy Demonstrations [OCED]).
• A whole-of-government approach allowing multiple agencies to coordinate action and increase programmes’ reach.
• “Stackability” of funding programmes, to allow for flexibility and the ability to combine funding sources for beneficiaries.